Financial software is gaining popularity in the enterprise, but it isn’t IT leading the charge for it — it’s the CFO’s.
Increasing adoption in the enterprise and continuing consolidation among vendors are making financial management software a hot commodity these days.
“The market’s hot,” said Paul Hamerman, vice-president of enterprise applications for Cambridge, Mass.-based IT research firm Forrester. “There’s a lot of vendors and there’s actually pretty good customer uptake [as they look] to fill out their solutions.”
Industry giants have started to recognize this emerging trend and been making acquisitions to strengthen their hold on the financial software market. Microsoft, for instance, acquired Great Plains Software and Navision several years ago and rebranded them as part of its Dynamics suite, while Oracle recently bought Hyperion. This month also saw SAP buying OutlookSoft.
As a result, the market has consolidated into half-dozen or so major players, including SAP, Oracle, Microsoft, Business Objects, Cognos, and SAS, Hamerman said. Still, there is plenty of business to go around, he added, given that many companies still rely on such rudimentary tools as Excel spreadsheets to run their planning and budgeting processes.
“But more and more are moving to industrial-strength solutions,” said Hamerman.
This rash of acquisitions and the introduction of new breeds of financial software all point to a new customer in the software market: the CFO. Five years ago, Suzanne Wilson, director of finance with Niagara Falls Hydro, was looking to change the company’s Cobol-based legacy system.
“Everyone wanted a new system . . . we now want to focus on data analysis,” said Wilson, who decided to go with Microsoft’s Dynamics GP solution. The focus of her team has shifted to what the data means. “It’s not just typing it in, but reviewing it. It’s less about data retrieval and entry than risk management and where you’re going,” she said.
IT-related initiatives from CFOs are becoming more common in the enterprise, said Hamerman.
Web-based technologies are providing ease-of-use that appeal to CFOs. For instance, Wilson’s system uses an arrow mechanism to toggle back and forth between screens, like in a Web browser.
Vendors that will succeed in this market are those that can sell to the CFO’s, said Joel Martin, vice-president, enterprise software at IDC Canada.
“It comes down to companies being able to deliver the actions that people want and talk the language of the CFO,” he said.
The trend of selling directly to business units could spell danger for the IT staff, according to Betsy Burton, a business intelligence and information management analyst with Stamford, Conn.-based Gartner Research.
“Vendors are selling to CFO’s because they can. IT people need to wake up and get involved…Your business is out there buying applications; [IT] can’t just get up and support them—that’s not the right thing. [IT needs] to be seen as a trusted advisor,” she said.
As end-users and business units continue to drive adoption of and use technologies on their own, Burton said IT professionals may have to reposition their role in the organization. “Frankly, [users are] not waiting for IT anymore. (IT) has to go from, ‘Thou shalt use this,’ to providing advice and support for the business.” 071690